Short-Term Palliatives And The 5 Terrible Tendencies Of Government

Absent an immediate crisis - and sometimes in the face of one - governments will often struggle to meet great challenges. Michael Boskin, former chairman of George H. W. Bush’s Council of Economic Advisors, recently described five tendencies of governments that should sound familiar. They include:

(4) Ignoring the laws of arithmetic, selectively counting some effects while excluding others; and

(5) Enacting programs or spending money in a crisis or boom where especially large unintended consequences become apparent only when the economy returns to normal.

This is a truly damning indictment of government arrogance, ineptitude, and overreach in the economy and beyond.

The short-term palliatives we are currently pursuing go against everything a long-term oriented society should aspire to achieve. Today’s policies encourage spending over saving, reward the profligate over the prudent, and support the failing at the expense of the successful. The antidote now being dispensed puts us squarely in uncharted territory in which the risks are outside the range of historical experience. There is no obvious exit and no path to normalcy.

Growing entitlements are popular with voters and with those whom they elect, for obvious reasons: because the bill never seems to come due. But come due it will. According to the law of economics named after the late economist and author Herbert Stein, if something cannot go on forever, it will stop. The result, which we are beginning to see already, is an acrimonious debate that divides rather than unites. Instead of efforts to expand the national pie through large investments in scientific and medical research and repair or replacement of our crumbling infrastructure, for example, we waste our breath bickering over the fairness of how we will share a flat-to-shrinking one.

Our spending is completely out of control, and, as of now, it seems as if the situation will have to become calamitous before we act. Let’s hope that it won’t then be too late.

The one thing Government will plan long term for is its continued existence, if not growth...

Professor Fekete has a new article up this week providing an alternate explanation as to why Germany is repatriating its gold. He also asks why the US still has bases in Germany and speculates that the bullion is so slowly heading back not because of their own citizens' demands... but at the urging of the USA!

"When a self-governing people confer upon their government the power to take money from some and give it to others, the process will not stop until the last bone of the last taxpayer is picked bare." - Kershner's First Law

"Throughout history periods of sound money have been marked by moral advance and prosperity. Conversely, periods of unsound money have been accompanied by moral decline." - Kershner's Second Law

"Reduce entitltments? Not a chance. Sorry, you taxed me for over 30 years, you can't move the goal posts or pull the rug out from under me - especially not after bailing out Wall Street. No way."

When it comes to government, the concept of "fairness" only works one way, from you to it. When the government disburses "benefits" it is giving you a gift. It can, and will, stop this gift-giving, whenever the incremental benefit to state power no longer justifies the cost of buying off the plebs. You don't get to tell the state what to do.

A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.
Alexander Fraser Tytler
What's the disappointing surprise? Invest with history. It rhymes and repeats. The 5000 year currency is a good start. Shorting bond for a time will work. Big pantry. Firearms. AG stocks. A little pile of UTES.

There's nothing stopping you from "going back to the founding principles" right now. In fact if more people were to do so, perhaps there could be some form of resolution, rather than the revolution we are facing.

The conclusion at the end is a statist argument at its best. "Instead of efforts to expand the national pie through large investments in scientific and medical research and repair or replacement of our crumbling infrastructure, for example, we waste our breath bickering over the fairness of how we will share a flat-to-shrinking one." This is a misnomer and slight of hand trick statists tend to play. They state the problems with outright authority and then stick in the idea that government somehow has the answer. If the government would just invest their stolen loot the right way is the common refrain.

I call bullshit.

The main core problem of this country is the idea that a collective group of boobs in some big fucking pretty building has the ability to allocate debt in the right areas of the economy instead of letting individual choices prevail. The government is in the business of finding the most profitable areas of the economy and stripping resources off of it in order to give it to their friends. The platitutdes that are devoted to the reasoning behind this investment and that investment misses the core problem of central planning and allows for the plebes to fight amongst themselves as to where the stolen loot should go.

why don't you begin at the beginning : One man one vote elects government. The people who then sit and decide in name of people who voted them in. Its called democracy and its called republic.

If that doesn't work then the people relect better ones...etc. Etc. If that doesn't work then its the end of demo and rep...its called dictatorship, oligarchy of fascism or whatever. There is NO reason that a republic in this day and age goes back there; to dictatorship...No reason, if the people want it to stay as republic...Take back the government of the people, people!

Don't JUNK the republic and democracy! The collective boobs ARE the people...wake up!

If the US feels the people do not have the right, or the ability, to elect its leaders then its over; you are back to the age of feudalism.

The economy already gave out several "blow jobs" in exchange for cocaine. The bubbles over the past decade were the "blow jobs." Since 2009, Bernanke is basically mainlining cocaine right into the economy's "vein" using QE.

Adding up the 6 componets does total -.17%, I think that is wrong. Anyone that remembers high school algebra KNOWS you can’t add individual percentages and get a valid %-change. One must add up the multiple components for Last-month and This-month and then calculate %-change on the Total. Do you have the underlying numbers that the gummint used? The real GDP change might be very interesting!